Main menu

Post navigation

Life Cycle Cost Analysis – Making a Case for Green Building and Efficiency Retrofits

Steven Forrester’s small Colorado engineering firm is four years old. While he started DMA Engineering during tough economic times, he is holding his own because of clients like the city of Louisville, where his firm recently designed a solar thermal lap pool for a city recreation center.

>"“When we present a design, 99% of the time, we do LCCA, “ says Forrester. “It shows we bring added value.”

In the case of the solar-heated pool, the facilities manager had to go to City Council members for approval. The LCCA demonstrated the financial incentive to do the project. Forrester uses LCCA mainly to compare different types of systems over the lifetime of the building. The price of new equipment is an easily comprehensible but incomplete cost. LCCA also accounts for future costs. LCCA adds in maintenance, energy use, tax incentives or rebates, and any salvage value. It also can cover replacement costs. For example, really good windows may last 50 or more years, so it’s not likely building owners would account for their replacement. Rooftop units, on the other hand, which are usually considered an inexpensive heating and cooling solution for commercial buildings, must be replaced much more frequently. “We typically see replacement 10-25 years,” says Forrester.

That means if design teams are thinking about the lifetime of the building, then the cost of one rooftop unit is really the cost of three, six, or nine units or more, explains Rocky Mountain Institute Analyst Roy Torbert. RMI recommends LCCA as standard practice on all new and retrofit building projects.

“Most equipment will be around for 20 years. Without doing the lifecycle analysis, you only know the initial costs rather than the full cost over the life of the building,” says Forrester. “I think it’s an invaluable part of making any decision about any piece of equipment.”

While Forrester compares the direct economic costs of alternative design solutions, some people and organizations are beginning to consider the indirect, more complex societal costs.

[…] RMI is helping GSA to use life cycle assessment to account for the environmental impact of building retrofits and operation, and will then convert the impact into a dollar value.

Life cycle assessment, or LCA, estimates the environment impact of processes and products in terms of greenhouse gas emissions, wastes, toxins, and particulate matter. GSA will wrap the hidden costs associated with this impact into the LCCA in order to provide a fuller analysis.

Design teams can use LCCA to show the tradeoffs between cost and another factor that is important to the client, such as carbon. Since President Obama has ordered all new federal buildings to be net zero by 2030, many energy service companies working on federal projects will be closely examining these kinds of tradeoffs. "<